Key advantages for the importer:
- Reduce the risks of international trade across different countries
- Lower cost
- Allows importer to avoid the advance payment or reduce the amount of advance payment (improving cash flow)
- To conduct the business in accordance with its plan while controlling all process including loading and transportation of goods.
- Assure the importer’s credibility to the exporter side
- The exporter can get payment as soon as the goods are shipped while the importer can pay after receiving the goods.
- Lower cost enables the importer to increase their trade turnover.
Key advantages for exporter:
- The exporter may receive payment after the goods are shipped, but the payment risk is very low because the importer’s payment risk is guaranteed 100% by Bank.
- The definite payment date allows the exporter to manage its cash flow effectively.
- If exporter fails to receive payment on due date from importer, exporter has full right to provide demand to the Guarantor bank and payment shall be received within 5 banking days in according to the International Banking Practice.
- You can transfer importer’s payment risk to your country’s any bank and able to receive payment from your account bank.